Wednesday, staff from the Haven, a local in-patient addiction recovery center for women, testified before the Arizona State Senate Committee on Health and Human Services seeking reimbursement for claims that have been owed since 2023.
95% of the facility’s operating budget comes from the Arizona Health Cost Containment System, according to Aimee Graves, president and CEO of the treatment facility. But the healthcare provider and others like it have been caught up in the state’s over-correction of the sober-living fraud scandal that was addressed in 2023.
The scandal was a large-scale Medicaid scheme in which operators targeted vulnerable individuals, predominantly Native Americans, offering false claims of in-patient addiction treatment services and submitted fraudulent claims to AHCCCS.
It has been reported that tribal advocates had raised warnings to state officials as early as 2019.
The scheme is estimated to have cost taxpayers up to $2.8 billion, said State Senator and Chair of the committee, Carine Werner at Wednesday’s hearing.
“We also learned that the fraud has evolved, that patient brokers have now begun removing AHCCCS members from the vital Medicaid coverage and shifting them to federally subsidized ACA market plans,” she said.
As a follow-up to a committee meeting held on August 18, individuals and loved ones who had been affected by the scandal, as well as providers dealing with withheld payments and administrative burdens testified.
In May 2023, the state suspended providers and started requiring more documentation, but this has had unintended consequences, affecting accredited and licensed providers like the Haven as well as clients covered under the American Indian Health Program.
The Haven estimates that it is owed more than $375,000 in back claims from that plan which is managed by AHCCCS.
This program is a fee-for-service program, which means that any provider can bill the system for services that they have provided, which is part of the reason that led to this massive fraud, said Emilia Honkasaari, vice president of communications and development at Haven.
“Fraudulent providers could keep on billing for services that were non-existent,” Honkasaari said.
Graves agrees that the state has taken the necessary steps to address the harmful and illegal activity.
“As a result however, legitimate providers like the Haven that have never been accused of fraud, waste, abuse, any kind of anything illegal, has gotten caught in the net with the overcorrection that’s going on across the state,” Graves said.
She emphasized that the Haven isn’t asking for special treatment, but fair treatment in order to continue providing life-saving services and keep the Haven’s doors open.
Since May 2023, more than 300 providers have been suspended from receiving Medicaid payments according to AHCCCS.
It remains unclear how many credible treatment centers are dealing with withheld payments.
